Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 124.301 | EURUSD 1.08251 | AUDUSD 0.73719 | NZDUSD 0.65722 | USDCAD 1.29957 | USDCHF 0.96453 | GBPUSD 1.55629 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               124.40 | 124.265

EUR/USD             1.0835 | 1.08135

EUR/JPY               134.76 | 134.52

AUD/USD            0.7385 | 0.7349

NZD/USD             0.6607 | 0.6560

USD/CAD             1.3006 | 1.2983

EUR/CHF              1.0441 | 1.0430

USD/CHF             0.96485 | 0.96295

GBP/USD             1.5573 | 1.5555

EUR/GBP             0.6960 | 0.69545
For Today

• EUR: The market opened around the 1.0825 levels and traded around the level for the best part of the session with dips down through the 1.0820 areas and unable to push above the 1.0835 areas market was very quiet with light volumes throughout the session, Topside offers into the 1.0870 levels with a push through the 1.0900 and a possible push through the level could open a small short squeeze with better offers appearing only as the market approaches the 1.1000. Downside bids from the 1.0820 levels and likely to be stubborn until the market moves through the 1.0780-70 levels with possible light stops before funning into light bids on a move to the 1.0750 areas and then stronger bids starting to make an appearance into the 1.0720 areas. A lack of data for the day and the low volumes over the past few days don’t bode well for a busy session.
• GBP: Cable as with the rest of the market traded quietly over the session moving from the opening levels to test initially above the 1.5570 levels before drifting back to trade along the 1.5560 levels and into the grey hours. Light offers into the 1.5600 areas before opening for another test to the 1.5670 areas and stronger offers, a push through the 1.5700 with those offers likely to be mixed with stops before opening up a little to 1.5750. Downside bids light through to the 1.5500 area where volumes are likely to increase however, the market through there is likely to be fairly open with better congestion below 1.5400.
• JPY: USDJPY opened around the 124.30 levels and slowly rose to the 124.40 areas in very quiet trading with very little of interest through the session, Topside sees congestion continuing through to the 124.70 levels where better offers are likely to start appear running to the 125.00 areas however, the offers are not likely to be as strong as you would normally expect and a move through will likely see weak stops and the market then starting to increase from the offer side. Light downside bids into the 124.00 level with those bids likely to continue to the 123.80 areas, weak stops through the 123.70 areas with bids likely to start appearing again from the 123.30 areas onwards.
• AUD: The Oz held the 0.7370-75 opening levels before moving higher to the 0.7385 area as RBA minutes were released, the initial buying with the speech almost identical to the past, decision to leave cash rate steady appropriate led to the rise however, another addition to previous releases was further AUD depreciation both likely and necessary tipping the market lower and the market has since drifted on essentially was nothing new to test to the 0.7350 areas. Topside offers continuing into the 74 cent levels and a push through see’s the offers continue to the 0.7420 areas before opening a little, possible offers every 20 pips or so before running into the 0.7480 areas and stronger offers from there through the 75 cent level. Downside bids from the 0.7330 levels down into a possible option related play around the 73 cent levels; a push through the level opens the downside with the market technically vulnerable to the 0.7150 areas.

Overnight News

CNY:

China’s state owned company profits edge down in the half year

JPY:

Japanese business mood subdued on uncertainty over China

EUR:

Greece’s euro exit back on the agenda next year, economists say

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

06:00     CHF        Trade Balance Jun C 2.50B | P 3.43B

08:30    GBP        Public Sector Net Borrowing (GBP) Jun C 8.7B | P 9.4B

Harry Hindsight              

• EUR: Limited action, with Greece open for business and the market looks for data for direction, opening around the 1.0835 areas the market pushed above the 1.0840’s before the market drifted in a close Tokyo session to the 1.0820 levels and held into the 1.0830 areas, early European buying with German PPI as expected saw the market move steadily up to above the 1.0860 levels before running out of impetus with only light offerings to deflect the market, the fall back was stronger with weak stops and a nervous market seeing the 1.0830 traded quickly, broadly holding, the range continued to move between these areas until the end of the London session and then finally continued lower once London had left testing to the 1.0810 before closing around the 1.0825 areas.
• GBP: Cable was dominated by EURGBP trading for the most part with the Cable drifting through the Asian session opening just above the 1.5600 levels and dipping only to the 1.5585 areas, the move into the London session driving to the 1.5630 levels in early London only for EURGBP buying to move in and reverse those gains and drive the market down through the 1.5550 and triggering light stops to touch the 1.5540 levels with EURGBP rising from the 0.6940 levels to push above 0.6975. Late trading into the London close saw the Cable touch back through the 1.5600 levels but once London left for the day the market drifted lower into a quiet low.
• JPY: With Japan on holiday the market slowly edged higher moving quietly to the 124.20 levels during the Asian session, move into the London session saw light EURJPY buying helping the market move through the 124.20 areas trigger light stops and a push towards the 124.40’s before ranging tightly for the day and finishing a quiet session around the 124.30.
• AUD: Market opened around the 0.7375 areas and drifted into the early part of the session dipping only 10 pips lower, movement in Gold sent the Oz quickly lower pushing through bids around the 0.7360 areas and then dropping quickly to the 0.7330 and that made the low for the day, the market moved off the low and while the rally was not particularly quick weak stops through the 0.7370 areas took the market to close to the 0.7400 areas before the market rejected the level. The rest of the session the market spent around the 0.7370-80 areas for the most part with a stab lower during early NYK session before returning to the previous range. The movement in the Gold remains a slight mystery, with aftermarket talk of one ticket in Asia setting the market lower and triggering breakout stops below the front month futures lows from Nov 2014 this caused several cut outs of trading as the market moved aggressively lower trading some $40 lower over the course of a minute or two before rallying to the mid-way point of the range.

Yesterday’s premiership results

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

GBP       Rightmove House Prices M/M Jul A 0.10% | P 3.00%

EUR        German PPI M/M Jun A -0.10% | C -0.10% | P 0.00%

EUR        German PPI Y/Y Jun A -1.40% | C -1.40% | P -1.30%

EUR        Current Account (EUR) May A 18.0B | C 23.1B | P 22.3B | R 24.0B

CAD       Wholesale Sales M/M May A -0.10% | C 0.00% | P 1.90%

Good Luck,

Andy

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